Standing to seek judicial review of an order of the state engineer; Utah Court of Appeals holds that appellants were not “aggrieved parties” for purposes of the UAPA in Utah Alunite Corp. v. Jones

Under the Utah Code, “[a] person aggrieved by an order of the state engineer may obtain judicial review in accordance with [the Utah Administrative Procedures Act]” and section 73-3-14. However, whether an aggrieved person has standing to seek judicial review of an order of the state engineer requires reference to not only Utah Code section 73-3-14, but the Utah Administrative Procedures Act (“UAPA”) as well.

In, Utah Alunite Corp. v. Jones, the Utah Court of Appeals was faced with determining whether the Utah Alunite Corporation (“UAC”) and the Utah School and Institutional Trust Lands Administration (“SITLA”) had standing to seek judicial review of a decision of the Utah state engineer, which approved the application of the Central Iron Water Conservancy District … to appropriate water in the remote Wah Wah Valley in west-central Utah. The appellate court held that “[b]ecause SITLA and UAC, although aggrieved persons, did not become aggrieved parties under [UAPA] in this proceeding, they lack standing, and we dismiss their appeal.”

Competing Applications

In October 2006, the Central Iron County Water Conservancy District filed an application to appropriate water in the Wah Wah Valley. In the following weeks, the Utah state engineer published notice of the conservancy district’s application as required by law. In response, approximately 300 protestants filed petitions objecting to the conservancy district’s application. However, SITLA, a substantial landowner in the valley from which the water was to be appropriated, failed to file an objection.

Then, almost six years after the objections were filed, in August 2012, while the state engineer was still considering the conservancy district’s application, SITLA and UAC, jointly filed a competing application to appropriate water in the Wah Wah Valley. Soon thereafter, the conservancy district filed a protest to the joint application.

State Engineer Rules Appellant’s Water Rights are Subject to District’s Senior Rights

After almost two more years passed, in May 2014, the state engineer finally issued a decision regarding the competing applications. The state engineer granted both the conservancy district and SITLA and UAC the water rights they had applied for. However, the grant to SITLA and UAC was made “subject to the [Water] District’s senior right.” SITLA and UAC saw the state engineer’s decision as essentially denying their application, given the fact that the state engineer had given higher priority to the conservancy district’s grant. As a result, SITLA and UAC sought judicial review of both of the state engineer’s order.

District Court Lacks Subject-Matter Jurisdiction

As it relates to the state engineer’s decision addressing the water rights of the conservancy district, the lower district court determined that it lacked subject-matter jurisdiction because SITLA and UAC were not parties to the informal adjudication of the conservancy district’s application. The district court also determined that it lacked jurisdiction because SITLA and UAC had not exhausted their administrative remedies by either timely protesting or seeking to intervene. According, the district court dismissed SITLA and UAC’s petition. SITLA and UAC appealed.

On appeal, SITLA and UAC argued that Utah Code section 73-3-14 was the “alpha and omega of standing to seek judicial review of an adverse decision of the State Engineer.” The appellate court disagreed, finding that a determination of standing for purposes of seeking judicial review of an order of the state engineer required reference not only to section 73-3-14, but also to the UAPA, as section 73-3-14 explicitly sets forth. Therefore, the Court of Appeals determined that “there are two essential requirements for achieving standing to obtain judicial review of a decision made by the State Engineer.”

Two-Part Analysis for Determining Standing

First, a party wishing to seek judicial review of an order of the state engineer must be an “aggrieved person” for purposes of section 73-3-14. Under the statute, an aggrieved person is an interested person with an “actual or potential injury” resulting from the state engineer’s decision. Second, even if a person is an “aggrieved person,” that person must also be a party. Thus, in the words of the court:

[A]lthough a person may be negatively impacted by a decision from the State Engineer that is adverse to his or her interests—and thus be “aggrieved” in a general sense—that person does not have standing to seek judicial review unless he or she becomes a party, pursuant to UAPA, in the proceeding sought to be reviewed.

The court pointed out that the terms “aggrieved person” and “aggrieved party” are not co-extensive terms under the UAPA. Under the UAPA, a “person” is “an individual, group of individuals, partnership, corporation, association, political subdivision or its units, governmental subdivision or its units, public or private organization or entity of any character, or another agency,” while a “party” is “the agency or other person commencing an adjudicative proceeding, all respondents, all persons permitted by the presiding officer to intervene in the proceeding, and all persons authorized by statute or agency rule to participate as parties in an adjudicative proceeding,” Therefore, only those members of the broader group of “aggrieved persons” who become “aggrieved parties”, i.e., those who commence an adjudicative proceeding, or are respondents in that proceeding, or are permitted by the state engineer to intervene or are otherwise authorized by statute or agency rule to participate as parties to participate in adjudicative proceeding have standing to seek judicial review.

As it related to SITLA and UAC, the Utah Court of Appeals determined that “[t]here is no question that [SITLA and UAC], although parties in their own parallel administrative proceeding, were not parties to the adjudicative proceeding commenced by the Water District’s application under UAPA.” “Therefore, although [SITLA and UAC] are aggrieved persons, they lack standing because only persons that are both aggrieved and qualify as parties—aggrieved parties—have standing under section 73-3-14 and UAPA to contest a decision of the State Engineer.”